Poseidon adventure: $350 million public subsidy for private desalination plant

The mighty Metropolitan Water District of Southern California agreed this week to pony up $14 million per year - or $350 million over the next 25 years, if you prefer to think of it that way - to pay for desalinated water in San Diego County.

The San Diego project, however, is much farther along, and will be Southern California's first major foray into ocean desalination. Construction of the $300 million-or-so plant should begin next year, and water is supposed to flow in 2012. It will provide enough water for about 300,000 residents, or 100,000 homes a year. (Over the quarter-century, that translates to some 1.4 millionacre-feet of new water - nearly twice the capacity of Diamond Valley Lake, the region's largest drinking water reservoir near Hemet, Met says. See Met report here: met-desal-report)

Poseidon hopes to issue more than $500 million in tax-free bonds to construct the Carlsbad facility.

The $350 million public dollars that will make their way to Poseidon's pockets over the next quarter-century come from Met's Local Resources Program, which aims to boost SoCal's own water supplies, and reduce dependence on the imported stuff. It's a controversial move:

Critics want Met to fund public projects, not private ones.

Environmentalists worry about the impact of highly salty brine, a byproduct of desalination, and want to pursue cheaper alternatives (conservation, recycling, recapturing stormwater and the like).

A protest letter circulated by Surfrider San Diego stresses Poseidon's problems in the Sunshine State. "In Florida, Poseidon's Tampa Bay desalination plant was $40 million over budget, five years late, and has yet to produce the 25 million gallons per day it promised on a regular basis," the letter says. "Now Poseidon plans to bet the health of our marine environment on its latest attempt to build a plant twice that size."

Peter Gleick, water expert, president of the Pacific Institute, and 2003 MacArthur Fellow, wrote that " The desperate drive to do a desalination project in California is leading to a set of financial travesties. Despite their initial claim that Poseidon would bear all of the financial burden and risk associated with the private plan to desalinate ocean water at an old power plant in Carlsbad and sell it to public water agencies, Poseidon now says it needs massive public subsidies."

How much of this is skin off John Q. Public's nose? The $350 million Met has promised to pay for desalinated water will only be spent if there actually is desalinated water to buy. Public-private partnerships have been touted as a way to tackle all sorts of problems. And Orange County's water wonks - a rather conservative bunch - do a collective shrug, saying they're in favor of finding new sources of water wherever they may be. Building one desalination plant does not mean alternate avenues will not be pursued - such as conservation, recapturing storm water, etc. There are, as they say, many roads to Rome. Or something like that.

That $350 million will, however, be the largest grant Met's Local Resources Program has made. And debate on whether this is the best way to spend that money will no doubt continue.

Poseidon and the its backers, however, are crowing over their victory. "We greatly appreciate the support that Metropolitan Water District has demonstrated on behalf of desalination," says a statement on Poseidon's web site, quoting Valley Center Municipal Water District General Manager Gary Arant (one of the nine San Diego agencies that will buy water from the Carlsbad plant). "With the ongoing drought, legal and environmental challenges, and State Water Project infrastructure challenges, the Seawater Desalination Program is a smart investment in California's water stability both now and for the future. The water produced locally by our private partner, the Carlsbad Desalination Project, will assist our region in developing a more diverse water portfolio while reducing our dependence on imported water at no risk to taxpayers."

Tampa is on everyone's mind. Folks will be watching. And Orange County will try to learn from San Diego's experience.

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